This invention relates to an electronic transaction system employing microchip cards which receive, electronically store and transfer therebetween digitized information relating to the monetary value of financial transactions.
An electronic transaction processing system using a prepaid microchip card is disclosed in U.S. Pat. No. 4,877,947. The patented system employs a customer's microchip card in which the customer's monetary value is digitally stored and a vendor's microchip card in which the vendor's monetary value is digitally stored. When a purchase is made, the customer inserts his card in a customer's microchip card reader/writer and enters a password on an attached keypad. The vendor enters the amount of the purchase on a keypad connected to a vendor's microchip card reader/writer in which the vendor's card has been inserted. The amount of the purchase is communicated from the vendor's microchip card reader/writer to the customer's microchip card reader/writer, and then from the two microchip card reader/writers to both microchip cards. With suitable verifications, the amount of the purchase is deducted from the balance recorded in the customer's microchip card and added to the balance recorded in the vendor's microchip card.
An electronic transaction system transferring a monetary value between an automated teller machine and a customer's microchip card is disclosed in PCT International Publication Number WO95/24690. In this system, the automated teller machine includes an ATM card in its housing in which a bank's monetary value is stored. A monetary value is transferred from or to the customer's microchip card via the ATM card. In case of withdrawal, the customer's microchip card is inserted by the customer in the automated teller machine, and the monetary value corresponding to the transaction amount he or she wishes to withdraw is transferred from the ATM card to the customer's microchip card. As a result, the monetary value in the customer's microchip card is increased, and the monetary value in the ATM card is decreased. In the case of a deposit, the monetary value is transferred from the customer's microchip card to the ATM card.
The electronic transaction system has many advantages over a cash payment system. However, to increase its popularity, the system must be secure against loss of monetary value, especially loss caused by a malfunction of the system when the monetary value is transferred.